Chinese export share of German automakers rises to a record high

Emden harbor

Last year VW, Daimler and the BMW Group exported 5.4 million vehicles to China.

(Photo: dpa)

Berlin The importance of the Chinese market for the German automotive industry has risen to a new record level. Four out of ten new cars are exported to China, reported the “Augsburger Allgemeine” on Saturday with reference to a study by the Center Automotive Research by the car expert Ferdinand Dudenhöffer.

In 2020, the German car groups Volkswagen, Daimler and the BMW Group exported 5.4 million vehicles to China. That was 38.2 percent of the total of 14.16 million new vehicles sold worldwide.

“The Chinese share of German car manufacturers has never been so high and it will continue to rise,” Dudenhöffer told the newspaper. Accordingly, the export share rose, although the actual sales figures for German vehicles on the Chinese market fell slightly by 250,000 new vehicles.

While BMW and Mercedes increased their sales, the VW group sold 383,600 fewer cars in China. BMW increased its Chinese export share in 2020 compared to the previous year from 28.5 to 33.4 percent, Daimler from 25.3 percent to 30.6 percent and among the car brands of the Volkswagen Group, the share of the Chinese business is now 41.4 Percent, after 38.6 percent in the previous year.

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VW and Audi are no longer imaginable without the China business, said Dudenhöffer. The importance of BMW is also growing. “The success and growth of the German auto industry, like economic growth in Germany, is shaped by China.”

More: BMW achieves CO2 targets – but the EU is already working on even stricter rules

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Tesla has deposited a security deposit – construction can continue

Tesla construction site in Grünheide

The electric car manufacturer plans to start production in July 2021.

(Photo: dpa)

Grünheide Shortly before the end of the deadline, US electric car manufacturer Tesla deposited a security deposit required by Brandenburg for the construction of the factory in Grünheide near Berlin.

The Tesla management confirmed the agreement between Tesla, Brandenburg and the State Office for the Environment to secure any dismantling obligations late on Friday evening, the Environment Ministry announced on Saturday. “The necessary security is provided by the provision of a letter of comfort by a German GmbH, combined with a deposit of 100 million euros.” This means that the deadline, which has meanwhile been extended by five days, becomes irrelevant.

According to information from the German Press Agency, the money was deposited between 11 p.m. and midnight. This means that no construction stop has to be imposed. The “Bild” newspaper and the “BZ” reported on the payment on Friday evening.

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USA blacklist Xiaomi and other companies from China

Frankfurt, Düsseldorf After Huawei, the Chinese technology group Xiaomi has also been sanctioned by the US government. The US Department of Defense lists the Beijing company on a list of “Communist-Chinese military companies”. The Xiaomi share then sagged on the Hong Kong Stock Exchange by more than ten percent. It also went downhill for papers from suppliers.

However, the sanctions against Xiaomi do not go as far as in the case of Huawei. While the US government has largely cut off the network equipment supplier from suppliers, Xiaomi initially asked US investors to sell their shares by November at the latest. In addition to Xiaomi, eight other Chinese companies are on the list (PDF document). The move is one of the last steps taken by US President Donald Trump.

A Xiaomi spokesman contradicted the assessment of the US authorities to the Handelsblatt. “The company is not affiliated with, nor is it owned or controlled by the Chinese military,” he said.

The company is preparing countermeasures, the spokesman announced, without giving any further details. Xiaomi expanded to Germany at the end of 2019 and opened a flagship store in Düsseldorf last summer.

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The Chinese government condemned the US actions. “The Chinese side will take necessary measures to protect the interests of Chinese companies,” said a Foreign Ministry spokesman.

Over the years, Trump has portrayed China as the greatest international threat to the USA and, among other things, claimed during the election campaign without any evidence that his competitor Joe Biden had been bought by Beijing. His government took action against various Chinese companies.

The hardest hit was Huawei. The network equipment supplier and smartphone manufacturer lost access to US technology – on account of the allegation that the Chinese government could force it into far-reaching cooperation. Huawei rejects this.

Before the sanctions, Huawei started to jump to the top of the world market in smartphone sales. Since the US bans, however, the group has not been able to sell any new models with pre-installed Google services. But these are extremely important for buyers in the West. Sales of smartphones in China remained unaffected, but Xiaomi has recently established itself as number three in the market after Samsung and Apple.

The U.S. Department of Commerce also blacklisted China’s third-largest state-owned oil company, CNOOC, which makes it harder for U.S. firms to do business with the company. As early as December, the USA had imposed restrictions on 60 other Chinese companies.

Xiaomi grew up selling cheap but technically sophisticated smartphones on the Internet. The company now also has all kinds of networked devices on offer, from televisions to rice cookers.

Effects for international investors

The fact that US investors will no longer be allowed to invest in the company’s securities in future means a major turning point for international investors. The share had risen by over 26 percent since mid-November, and by over 130 percent since January 2020. Now the upward trend should at least be dampened.

Trump’s actions also have consequences for investors outside the US. So-called ADRs, with which investors abroad can trade Xiaomi securities, have meanwhile collapsed by over ten percent. These American Depositary Receipts are US dollar-denominated share certificates or depository receipts that represent a certain number of shares in a foreign company and that can be traded on US stock exchanges in their place.

In addition, the shares of major Xiaomi suppliers also lost on Friday: FIH Mobile, a company that helps assemble smartphones, fell by almost 14 percent after a strong rally in recent days. The shares of the supplier Largan Precision, Sunny Optical Technology and AAC Technologies Holdings also fell. According to loan dealers, spreads on Xiaomi’s dollar bonds increased by as much as 60 basis points on Friday.

Financial analysts on site were surprised by the decision. Kevin Chen of the Hong Kong securities trading firm China Merchants Securities described the news as “very surprising”. Many investors should now reap profits from last year’s rally, according to Chen. Nevertheless, he explains that the downturns on the stock market could be “short-lived” and that no fundamental damage should arise for Xiaomi.

Trump had also tried since the summer to force a sale of at least the US business of the popular video app Tiktok to American investors. However, the Chinese government torpedoed the plans with export restrictions on software. Regardless of this fiasco, however, Trump’s government began to force eight more apps out of the US market in early January, including the payment services Alipay and Wechat Pay, which are popular in China.

In the closing stages of Trump’s term in office, his government made several major decisions in foreign policy that set Biden in front of a fait accompli. A few days ago, for example, Cuba was put back on the US terrorist list. In Yemen, the US government targeted the Houthi rebels, an ally of Iran in the civil war country. Washington had previously recognized Morocco’s sovereignty over the Western Sahara, surprisingly.
With agency material

More: China is increasingly decoupling from the global economy – these are the consequences for European companies

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China is increasingly decoupling from the global economy

Beijing, Berlin, Düsseldorf Mostly once a year, China’s head of state and party leader Xi Jinping gives a speech to high-ranking ministry and provincial leaders at the Central University of the Communist Party, which sets the course for the year. But this time it had a special meaning. Because the five-year plan is currently being finalized, which should set the course for the economy in the People’s Republic from March to 2025.

Foreign company representatives may not have liked what Xi said behind closed doors earlier this week. “The most essential feature of building a new development pattern is to achieve a high level of self-sufficiency and self-improvement,” says Xi. ”

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Siemens receives billion-euro order for express train project in Egypt

Joe Kaeser

The outgoing Siemens boss came to sign the letter of intent.

(Photo: Reuters)

Kairo, Berlin Siemens has again received one of the largest orders in the company’s history from Egypt. The Munich-based company is to build the country’s first high-speed network and deliver trains. The order has a volume of three billion dollars in the first stage, a total of seven billion dollars.

The importance of the order was already evident from the fact that the outgoing Siemens boss Joe Kaeser and his successor Roland Busch arrived on Thursday to sign the letter of intent. The Egyptian President Abdel-Fattah al-Sisi was also present at the ceremony.

“With the construction of a highly efficient rail system for the country, we will support the Egyptian population with affordable, clean and reliable transport,” said Kaeser.

The Egyptian government plans to spend a total of around 23 billion dollars on the planned 1,000-kilometer rail network. An electrically operated route will extend from Ain Sochna on the Red Sea to New Alamein on the Mediterranean coast. According to the Egyptian government, it should lead through the planned new capital in the desert east of Cairo, which is currently under construction.

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The project was fiercely contested between providers from China (XI / CRRC), France (Alstom) and Germany (Siemens), it was said in negotiating circles. The German government supported the Munich-based company considerably.

The Siemens rail division can really use the order. The industry recently suffered from the corona pandemic. At Siemens Mobility, new orders fell by 29 percent to 9.2 billion euros in the past fiscal year.

However, the rail division still benefited from major orders from the past. In the past fiscal year, sales grew by two percent to a good nine billion euros. In this way, Mobility stabilized the entire group, which had to accept a slight decline in sales. With an operating return on sales of 9.1 percent, the division was still just within the medium-term target of nine to twelve percent.

Siemens has been doing good business with Egypt for a long time. In 2015, Siemens boss Kaeser negotiated the largest order in the company’s history to date. Egypt ordered gas-fired power plants and wind turbines for a total of eight billion euros.

More: Deutsche Bahn wants to test Siemens hydrogen train in 2024

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Entry into vaccine competition threatens reputation

Corona vaccine

India wants to enter the global vaccine competition with a vaccine developed at home.

(Photo: Reuters)

In the global turmoil over scarce vaccines, the large emerging countries cannot afford to wait for remaining deliveries from Europe and America. They are therefore rightly relying on the innovative strength of their domestic pharmaceutical industry and see themselves on the right track: After China and Russia, India has now also approved a coronavirus vaccine developed in its own country. Given that countries are home to more than a third of the world’s population waiting to be vaccinated, any additional option in immunization is certainly good news.

But like the Russian and Chinese authorities before, the Indian authorities are now making the mistake of being quick rather than thorough. The government of Prime Minister Narendra Modi now allows vaccinations with a vaccine that is still in the middle of clinical trials and has not yet proven its effectiveness from the perspective of health experts.

It is absolutely understandable that Modi relies on short routes in view of the huge challenge of immunizing a billion-dollar population within a few months. But in the end, taking questionable abbreviations is likely to do more harm than good to his goals: Because the doubts that are now being expressed about the approval process threaten to be reflected in the willingness to vaccinate in the coming weeks.

Calculation could lead to misjudgment

There is suspicion that Modi is not only looking at the approval of the first Indian coronavirus vaccine from a medical point of view, but also sees it as an ideal opportunity for self-promotion: the politician, who is known for his extensive self-promotion, only needed one on Monday a few sentences to transition from his praise of Indian scientists to his flagship project “Make in India”, with which he wants to position the subcontinent as the new heavyweight in global supply chains.

In his speech, the head of government emphasized that it is not primarily a matter of overrunning the world markets with Indian products, but rather that he would like to increase global acceptance for goods from his country. Modi seems to believe that headlines about the innovative strength of the Indian pharmaceutical industry will bring him the hoped-for positive attention in the corona crisis.

But the calculation could prove to be a miscalculation: Those who prefer to ignore the annoying details in favor of an effective appearance can easily stumble. And when it comes to vaccines for hundreds of millions of people, missteps are by no means acceptable.

More: Why Bangladesh is experiencing an economic miracle despite the corona crisis

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US stock exchange NYSE does not block Chinese telecom companies after all

Trader an der New York Stock Exchange

The shares of the three initially excluded companies rose after the withdrawal of the NYSE on the Hong Kong stock exchange by up to 8.5 percent.

(Photo: Reuters)

New York The US stock exchange operator New York Stock Exchange (NYSE) has withdrawn its plans to exclude three state-owned Chinese telephone companies from stock trading. After further consultations with the relevant supervisory authorities, China Mobile, China Telecom and China Unicom are likely to stay, the NYSE announced on Monday. She did not give any further details.

The NYSE had only announced the lock on Thursday and referred to a US government decree from November. In November, the government banned investments in a total of 31 companies that they claim are controlled by the Chinese military.

After the decision in New York, the share prices of the three companies on the Hong Kong Stock Exchange rose by more than five percent each on Tuesday. Investors who sold the shares of the telecommunications company in the US on Monday were thus caught on the wrong foot.

A Jefferies Financial Group analyst called the turnaround “bizarre”. Jackson Wong, Director of Asset Management at Amber Hill Capital in Hong Kong, called the NYSE’s decision “quite unexpected”.

With the NYSE unclear as to why the NYSE changed course, investors speculated whether this was merely due to the stock market’s initial misinterpretation of the executive order or more general geopolitical implications.

US government officials accuse the Chinese Communist Party of exploiting US citizens’ access to US technology and investments to strengthen the country’s military. The Chinese government, on the other hand, accuses the US of using the national security argument as a pretext to discriminate against Chinese companies in competition.

More: Read here why the optimism remains unbroken on Wall Street.

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Canada rejects acquisition of Arctic gold mine

Gold

With the acquisition of TMAC Resources, Shandong Mining would have got a gold mine and a port in Hope Bay on the Northwest Passage, the shipping route through Canada’s Arctic Islands.

(Photo: Reuters)

Ottawa The Canadian government has rejected the takeover of a raw materials company in Canada’s Arctic by the Chinese company Shandong Gold Mining. Apparently, security concerns led Ottawa to make this decision.

With the acquisition of TMAC Resources, Shandong would have got a gold mine and port in Hope Bay on the Northwest Passage, the shipping route through Canada’s Arctic Islands. China’s interest in TMAC also underscores the Arctic’s growing global strategic importance.

Canadian junior company TMAC announced Prime Minister Justin Trudeau’s government decision ahead of the Christmas holidays. TMAC is “disappointed” with the government’s decision. The transaction will not take place now, said company boss Jason Neal.

The Ministry of Innovation, Science and Economic Development, which under the “Investment Canada Act” examines applications for takeover of Canadian companies by foreign countries, did not itself publish a press release and did not want to comment because of the confidentiality required by law. Shandong Mining Co. Ltd. wanted to acquire 100 percent of TMAC Resources Inc. for 1.75 Canadian dollars per share.

That would have a market value between 200 million and 230 million Canadian dollars, the equivalent of up to around 150 million euros. The TMAC shareholders approved the takeover on June 26th with an overwhelming majority of 97 percent.

Relationship between Canada and China strained

The Chinese embassy said in a statement that Canada should “offer fair, open and non-discriminatory market conditions for companies from all over the world including China”. TMAC mines the precious metal in Hope Bay not far from the community of Cambridge Bay in its Doris gold mine.

The value of the transaction is rather low compared to other acquisitions in the raw materials sector. But the deal was politically explosive for several reasons. Canada’s relations with China have been strained since the chief financial officer of the Chinese telecommunications group Huawei, Meng Wanzhou, was arrested at Vancouver airport in December 2018 on a US extradition request.

Extradition proceedings against Meng are pending in a Canadian court. Immediately after Meng Wanzhou’s arrest, Canadians Michael Kovrig and Michael Spavor were arrested in China on charges of espionage. Canada regards this as retaliation, while China rejects any link between the two proceedings.

In addition, Shandong, which the Canadian media describe as controlled by the Chinese state, would have received a base with the takeover of TMAC in the middle of the Northwest Passage. It is expected that with advancing climate change the Northwest Passage will become navigable and thus gain in importance for international shipping.

In the narrow shipping route through the Arctic archipelago of Canada, a base could be of great strategic importance for China. It could therefore also have international significance. For Canadians, whose claims to sovereignty over the waterways in the far north are repeatedly questioned – also by the European Union and the USA – sovereignty over the Northwest Passage is a very sensitive question.

Protest

Protesters demand the release of Michael Spavor and Michael Kovrig, in Vancouver.

(Photo: Reuters)

The USA is critical of China’s Arctic policy

Therefore, even without official confirmation by the government in Ottawa, it is plausible that security and sovereignty considerations have influenced the balance between economic and national interests. This balancing must be made in accordance with the “Investment Canada Act”.

The daily newspaper Globe and Mail also reports on “pressure from the US government”. The US embassy in Ottawa initially did not comment on Canada’s decision. The US has been warning for some time that China could use civil research in the Arctic, investments in raw materials and expanding shipping as vehicles to gain a strategic foothold in the Arctic and ultimately strengthen its military presence.

US Secretary of State Mike Pompeo pointed this out in a very confrontational speech on the sidelines of the Arctic Council’s deliberations in the spring of 2019 in Rovaniemi, Finland. Pompeo sees “a new age of strategic engagement in the Arctic, with new threats to the Arctic and to all of our interests in this region”

In 2013 the Arctic Council granted China observer status. In 2018, China formulated its Arctic policy and, despite the distance between China and the Arctic, referred to itself as the “near Arctic State”. The self-designation underlines China’s interest in the region.

China wants to use the shipping routes and is interested in the raw materials of the Arctic, which include not only oil and gas, but also precious metals and technology raw materials. China sees shipping through the Arctic as the “polar silk road”.

Northwest Passage

For Canadians, sovereignty over the Northwest Passage is a very sensitive issue.

(Photo: dpa)

China’s new role in the Arctic

It is intended to help diversify trade routes and create a possible alternative to the southern maritime Silk Road through the Strait of Malacca, the Indian Ocean, Suez Canal and the Mediterranean. In its “Arctic Strategy” from June 2019, the US Department of Defense speaks of an “era of strategic competition” in the Arctic.

While China was mentioned rather marginally in earlier Pentagon documents on the Arctic, the relationship between economic initiatives and the possible resulting military presence is now described. In March 2020, Russia also underlined the importance of the Arctic for the socio-economic development of the country with a decree signed by President Putin “On the basis of the state policy of the Russian Federation in the Arctic for the period up to 2035”.

The Russian government makes it clear that the Arctic is of central geo-economic and geo-political importance for the country. Russia relies on the energy resources, metals and minerals that lie in the Arctic floor and in the sea near the coast. Investments should be made in the economic infrastructure, which is becoming even more expensive due to the thawing permafrost soil. The expansion of the military infrastructure is also a high priority.

The Canadian political scientist Rob Huebert from the University of Calgary therefore speaks of a new “strategic triangle” that is formed by the USA, Russia and China and for which he has found a handy abbreviation: NASTE, which stands for “New Arctic Strategic Triangle Environment” stands. Tensions in the Arctic are not caused by conflicts over Arctic issues, but by the rivalries of the great powers.

He sees the strained relationship between the US and Russia with the simultaneous rise of China, which challenges the US and possibly also Russia on the world stage, as a reason for new strategic and military activities in the Arctic.

It is obvious to him that for the US and Russia, the Arctic is the best starting point to strike at each other. This is one of the reasons the Arctic became “a region of overwhelming strategic importance when the US and Russia began to challenge each other’s interests in the international system”.

China is complicating the situation in the Arctic

It is not about the conflict “over the Arctic, but the use of military power from the Arctic, which gave this region its geopolitical significance”. According to Huebert, the fact that China is now calling itself the “near-Arctic state” in this strategic field and is competing with the USA and, in the longer term, with Russia as well, makes the situation even more complicated.

The historical bipolar system is now shaped by the appearance of three powers, and this makes the region “more important and more dangerous”. For TMAC, after the broken China deal, it is about securing the continued existence of the Doris mine.

It went into production in 2017, but is struggling with technical and structural problems. TMAC needs cash inflow to continue operations and repay loans. “The Hope Bay Gold Belt has considerable value,” said TMAC President Neal.

In an interview with the Nunatsiaq News published in Iqaluit, the capital of the Arctic Territory of Nunavut, he assured that the mine would not be “mothballed”. He had hoped that with the takeover by Shandong he would be able to put the mine on a secure financial basis.

He did not want to speculate about the reasons for Canada’s government rejecting the transaction, but admitted that this shows “that relations between Canada and China are currently not at all good”. The region’s Inuit organization is also counting on the Doris mine to attract the interest of domestic investors and financial institutions in view of the gold price, so that the mine can continue operations and jobs are secured for the people of Nunavut.

More: EU and China agree on investment agreements

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The stock exchange begins with the deletion of three Chinese companies

View of the New York Stock Exchange

Shares in Chinese companies are no longer allowed to be traded.

(Photo: AP)

New York The New York Stock Exchange has initiated the delisting of three Chinese companies with state participation. As of January 11, the shares of the telecommunications companies China Telecom, China Mobile and China Unicorn can no longer be traded on the New York Stock Exchange (NYSE), the exchange operator announced on Friday.

According to the New York Stock Exchange, the three companies have too close ties to the Chinese military. They are therefore “no longer suitable”. The Chinese companies initially did not comment. They are also listed on the Hong Kong stock exchange and generate only a very small part of their sales in the USA.

Nevertheless, this measure has a symbolic effect beyond Wall Street. In November, US President Donald Trump banned Americans from investing in Chinese companies that support the military there. To this end, he presented a list of companies whose stock ownership is prohibited for US persons or companies. This included, for example, aviation groups, tech companies and even companies from the telecommunications sector.

Trump justifies the ban by saying that these companies offer the Chinese military access to new technologies, which in turn would enable China to behave more aggressively. The People’s Republic is increasingly using the American chapter to advance the development and modernization of its military, secret service and other security apparatus, it said in the relevant decree.

Trump had taken strict action against Chinese companies several times in the past. For example, the government imposed a chip embargo on the successful technology company and smartphone provider Huawei. The risk that China could launch cyber attacks via Huawei technology in critical infrastructures such as the ultra-fast 5G network is too great.

More: US stock market: optimism on Wall Street remains unbroken

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Qatar joins Siemens’ joint venture Fluence

Battery storage from Fluence

The large batteries help to stabilize the power grids.

Munich The Siemens joint venture Fluence sees itself as the world’s leading provider of large battery storage solutions. According to information from the Handelsblatt Qatar, it is now investing 125 million dollars in the joint venture that Siemens operates with the US utility AES.

The Qatar Investment Authority (QIA) is taking over around twelve percent of the shares as part of the capital increase. Fluence is valued at more than a billion dollars as a result. Siemens and AES want to remain long-term shareholders with 44 percent each.

Energy storage is a key element of the energy transition, said Siemens board member Matthias Rebellius, who heads the Smart Infrastructure division. Siemens defined the business as a significant, long-term growth area. QIA’s investment will advance Fluence in a dynamically growing market.

The proceeds from the capital increase through Qatar’s entry are to be used to develop new products and conquer new markets worldwide. The challenge of climate change can only be met if the strengths of engineers and investors around the world are pooled, said Fluence CEO Manuel Perez Dubuc.

According to AES CEO Andrés Gluski, Fluence should increase its sales fivefold this year to $ 500 million. This makes the company the market leader in its segment. Current projects include, for example, a 112 megawatt storage facility next to a solar park in Chile.

Pilot plant in Chile with Porsche

The joint venture is also currently planning to build the world’s largest battery in Australia. The project envisages the installation of two lithium-ion batteries with an output of 250 megawatts each, which will be built in the states of Victoria and New South Wales.

At the moment, Tesla holds the record. Elon Musk also had the world’s largest battery with 150 megawatts built in Australia. Energy storage systems such as those from Fluence and Tesla should be able to absorb excess electricity at network nodes and then release it again in order to compensate for fluctuations in renewable energies and to better utilize existing lines.

Hydrogen can also perform a similar function – storing excess electricity from renewable energies. Siemens Energy is currently building a pilot plant with Porsche in Chile.

Chile is considered to be one of the best wind power locations in the world. In addition to a 3.4 megawatt wind power turbine from Siemens Gamesa, an electrolyser from Siemens Energy is to be installed. With the help of wind power, it will produce climate-neutral synthetic gasoline and methanol. The fuels are accepted by Porsche.

Siemens’ strength lies more in large systems

For a long time it was difficult to identify a clear strategy for storage solutions at Siemens. The Munich-based company – before the energy business was split off – also entered the market for smaller solar home storage systems, for example. However, the marketing of the Junelight battery system was discontinued in autumn.

According to estimates from industry circles, Siemens entered the segment too late, which had long been divided into smaller medium-sized companies such as E3 / DC, Senec and Sonnen. The strength of Siemens, however, lies more in large-scale systems than in small-scale business with end consumers.

Siemens had already brought the Siestorage energy storage platform for large batteries into the joint venture with AES in 2017. The Americans contributed their platform Advancion to Fluence.

In the era of the energy transition, the market is considered attractive. “Battery storage systems in particular have the potential to further advance the energy transition and to make the power grid more flexible,” says the German Energy Agency (Dena). According to forecasts by the market researcher BloombergNEF (BNEF), energy storage systems for a total of 620 billion dollars could be installed worldwide by 2040.

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